In this week’s Monday Motivation, Patrick Bet-David explains why lucky millionaires go bankrupt:
PBD re-visits a time when he consulted a concerned CEO with an unusual problem — his business doubled in revenue over the previous year. The client was nervous because he was aware of the fact that market conditions were the primary reason behind the increased revenue.
PBD informed the CEO that the good news is that he was aware of this, but the bad news is that his revenue could drop by 50% once market conditions normalized. The fact of the matter is that a lot of business owners get lucky and have massive success at the beginning if they enter a hot market but may not experience the same growth once the market stabilizes.
Examples of this include real estate agents and mortgage brokers that got rich leading up to 2008 and investment bankers who had a ton of business when interest rates were low between 2020-2021 as new IPO’s and SPACs were being launched every week. With both of these examples, people who benefited massively at the onset eventually got crushed. Conditions will almost always go back to normal unless you’ve entered a new industry that is continuously experiencing exponential growth. If your business is thriving because of abnormal market conditions and you are oblivious to it, you will likely fail when conditions return to normal.
It’s a fatal mistake to fall under the belief that you are responsible for the success of your business during abnormal market conditions. In order to have a durable business that continuously grows, you need a great operator.
Being a great business operator is an entirely different discussion, and that is why PBD created the app called Minnect — a platform that allows anybody to connect with industry experts and seek advice. Download and book your first session with an expert today!
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